The high cost of oil, supported by America’s refusal to even entertain the idea of conserving energy, supported by fierce resistance to a gas tax which would curb demand, actually aids the terrorists. So argues Thomas Friedman in his column today:
Of all the shortsighted policies of President Bush and Vice President Dick Cheney, none have been worse than their opposition to energy conservation and a gasoline tax. If we had imposed a new gasoline tax after 9/11, demand would have been dampened and gas today would probably still be $2 a gallon. But instead of the extra dollar going to Saudi Arabia – where it ends up with mullahs who build madrasas that preach intolerance – that dollar would have gone to our own Treasury to pay down our own deficit and finance our own schools. In fact, the Bush energy policy should be called No Mullah Left Behind.
Friedman argues that reform in the Middle East (the only rationale for invading Iraq that hasn’t been proven a mistake yet) requires lower oil prices and lower oil prices require less demand and a gas tax (which would also feed the treasury) will lessen demand.
We need to dramatically cut our consumption of oil and bring the price back down to $20 a barrel. Nothing would do more to stimulate reform in the Arab-Muslim world. Oil regimes do not have to modernize or govern well. They just buy off their people and their mullahs. Governments without oil have to reform to create jobs. People do not change when you tell them they should – they change when they tell themselves they must.
He cites the examples of oil-poor nations like Jordan, Bahrain, and Dubai, all of which are peacefully reforming as we speak and the examples of oil-rich nations like Saudi Arabia, Syria and Iran, all of which are either in chaos or cruelly oppressive.
Energy expert Phil Verleger puts it quite succinctly according to Friedman:
“U.S. energy policy today is in support of terrorism – not the war on terrorism.”
So two groups benefit from higher oil prices: the oil industry and the terrorists. That’s a gross oversimplification, I know, but if that’s what it takes to get Americans to conserve, I’m willing to oversimplify.
I’ve been arguing that conservation was a message Bush should be hammering home not only because it’s morally the right thing for us to do all the time, IMO, but also because of how our dependence on ME oil handcuffs us in dealing with the states over there from which the terrorists actually come. It drives me nuts that when 15 of the 19 terrorists were Saudi, we’re acting like Hussein is the source of all evil. But arguing that we should declare a rhetorical war on Saudi Arabia gets me pooh-poohed as naive. We have to gingerly nudge them into reforms by bombing the hell out of their neighbors…we can’t upset the flow of oil. What we’re really talking about here, from an individual’s point of view, is being able to drive more. I know plenty of folks depend on their cars for their livliehoods, but plenty of Americans drive humungous SUVs that they honestly don’t need to drive as often as they do. By cutting back, we’ll lower the cost of oil and push the more oppressive nations in the Middle East toward reform, nonviolently.
How much reduction do you expect from a moderate (less than 3 or 4 dollars) increase in gas tax? How much reduction would be needed to dramatically affect the world oil market in the way which Friedman outlines.
I suspect (though could not prove today) that the answers are some reduction, and dramatically less than is needed for the effect desired.
Good questions Sebastian.
I suspect the threat of what it could do might help bring about the desired effect somewhat too, though. There’s no good reason not to try IMO.
The problem with just trying it is that a gas tax is one of the most economy-slowing taxes available in the government’s arsenal.
I think both Edward and Sebastian make sense here (!!!). It is clear that high oil consumption helps fund terrorism, but it is not clear that a high gas tax would have the major effect needed. In addition, it doesn’t strike me as the fairest tax around. I live in an urban area and have no need to drive much. Others are differently situated.
Perhaps we could acomplish some of this with a different approach. Say we give substantial subsidies for the purchase of high-mileage automobiles, or lower registration and license fees, or otherwise encourage movement toward lower gasoline consumption. We could even improve Amtrak. (Yes, I know that makes conservatives shudder).
The problem with just trying it is that a gas tax is one of the most economy-slowing taxes available in the government’s arsenal.
Another terrorist attack, while not certain and hopefully preventable, will also slow down the economy…at a certain point, we must work to reform those ME nations. I’d rather we do it nonviolently.
maybe we could start lowering oil demand by raising efficiency standards on (non-)S(non-)UVs and trucks.
Certain tax incentives for buying SUVs aren’t helping either.
I suspect that if we want to do something in this vein, closing the SUV exemption on MPG requirements would be a less damaging and almost equally effective (which may be to say not very effective) measure. It wouldn’t be a drag on the economy.
Also, the best incentive I’ve heard for electric/hybrid cars at the local level is free parking.
Also, the best incentive I’ve heard for electric/hybrid cars at the local level is free parking.
Now that’s my kind of green thinking…where’s that happening?
Free parking is a good idea. Doesn’t cost much, probably, and is a great convenience.
My preference would be for a reasonable gas tax, maybe fifty to seventy five cents, with the revenues going directly to tax credits for people who buy highly efficient vehicles and research into alternative energy sources.
I’d scrap the current CAFE system and replace it with a graduated fee system for all vehicles, trucks and cars — commercial and private, that fall below a certain MPG rating, with higher fees for poorer mileage.
Remember John Anderson? Gas tax to shore up Social Security and reduce dependence on oil in 1980. Part of a bipartisan Unity party platform.
Prophetic.
This is a tough problem, but I don’t think it helps when Friedman just makes stuff up. “If we had imposed a new gasoline tax after 9/11, demand would have been dampened and gas today would probably still be $2 a gallon.’
Probably? Probably? Friedman is talking out of his posterior. I don’t know what the effect of a gas tax would be upon demand, but I’m not a columnist for the NYTimes. If I were, though, I’d be sure to quote some smart people from Resource for the Future.
As for his broader argument, the catch is that Saudia Arabian income per capita has, in fact, declined as the bottom fell out of gas prices. And yet this has not, to date, motivated them to get their act together. What motivates the smaller Gulf states is their lack of reserves. The House of Saud can adopt the “what, me worry?” approach to economic development because it has the largest oil reserves in the world.
So while I’m in favor of a gas tax in theory, I don’t think T. Friedman is making the right case here.
San Jose has introduced an incentive program that includes free parking in public parking facilities and in metered parking spots. Here’s an article making mention of some of the other incentives being implemented.
Wouldn’t it be wonderful if conservation was considered a patriotic virtue?
Wouldn’t it be better to simply ration gas?
Wouldn’t that more quickly and effectively both meet the level of oil imports we think are needed to affect the price of oil AND more quickly drive us to identify and, more importantly USE, fuel saving techniques?
And heck, allow people who spend a ton on housing so they can walk to work to sell their cards* back to the government, which could then auction the allotment to those determined to use more gas. That way the government still “taxes” those desiring to drive more, while benefiting those who drive less.
*Most gas stations take credit cards at the pump. I’d imagine the rationing to be distributed via card like food stamps are currently. Sell your card and you’ll get NO gas.
Gas rationing? Never find a workable plan without assessing every single persons needs and then applying some complicated formula. Never pass.
I’ve always accepted Friedman’s basic point about conservation, but had grave doubts about the gas tax, among other things because it’s regressive, all the more so since some people have to drive as part of their job, and many of them are broke. (I speak as someone who once lived on about $280/month, in 1988, which I earned throwing papers. Very, very hard to pay for gas, but without it, no job.) I vote for some combination of incentives for conservation, both for individuals and for corporations, for reclassifying SUVs as cars, and for raising CAFE standards and the analogous standards on e.g. air conditioners.
Yermum, in the DC metro area, hybrids are exempt from HOV restrictions on all freeways as well. (I think it might be true throughout all of Virginia, in fact.) And, given the high median income around here, I see a lot of Priuses on I-66 during the HOV hours.
Jeez carsick, if not applying a complicated formula were the criteria we wouldn’t have government at all 😉
I vote for some combination of incentives for conservation, both for individuals and for corporations
That sounds good. Then without assessing every single persons needs and then applying some complicated formula, couldn’t we identify an amount that we’d like to ration everyone to and then allow a tax deduction for the value of the gas not purchased under that amount?
Phil — thank you, thank you, thank you. I had no idea; I drive a Prius; I go to DC a fair amount. Thank you.
I spoke too soon, hilzoy — to travel in the HOV lanes, you have to have a Virginia Special Clean Fuel license plate on your car. Which leads me to believe the same is true in Maryland. You’d think the two states involved would sign a reciprocal agreement of sign kind, especially with traffic being what it is here.
“And heck, allow people who spend a ton on housing so they can walk to work to sell their cards* back to the government, which could then auction the allotment to those determined to use more gas. That way the government still “taxes” those desiring to drive more, while benefiting those who drive less.”
Crionna. You are basically just describing a market in gas. We already have a market in gas.
Phil — I would have checked it before the next time I had to brave the Beltway, but thanks. I don’t think we do have such a plate — at any rate, I bought my lovely Prius in MD, and since the dealer arranged the plates, you’d think he would have gotten one, if it existed. But I did, completely unexpectedly, get to pay no sales tax, which was nice.
So if you ever see a green Prius on the Beltway with MD plates and a ‘Republicans for Voldemort’ bumpersticker, it’s probably me, doing my best to reduce our dependence on Saudi Arabia.
Free parking wouldn’t work in suburban areas, because parking is always free. There’s oceans of parking.
And the suburbs are exactly where there’s little or no public transportation, everyone has (and needs) a car, and many of the people drive status-symbol SUVs but have no utilitarian requirement for such a vehicle.
In cities where you do pay for parking, it would be even better if there were some incentive for private parking lots to provide discounts for hybrid/electrics.
Don’t forget modern diesels: they’re the better choice for drivers with long highway commutes.
Sounding a bit like the mad inventor, but why hasn’t there been more work on biomass diesel? A friend of mine in Australia is doing it and says it works great. Here is a url with more info
If we’re going to encourage fuel conservation, I think a gas tax is about the only sensible way to do it. (Ideally, we set the tax so that the true cost of gas, including environmental and national security costs, is reflected at the pump.)
Imposing tighter fuel economy standards raises the prices of new cars, and does so in a somewhat hidden way. It also doesn’t take effect for many years, and requires that the people setting the fuel economy standards be able to guess how efficient it makes sense to demand that cars become. (If you pass 100 MPG requirements and stick to them, there will be essentially no standard size cars that can meet them.)
IMO, trying to do complicated things with rationing, rebates for buying less than your share of gas, etc., will end up being both pointlessly complicated and expensive to run, and more unfair than a simple tax per gallon of gas. Just look at the tax code for examples of why this is likely.
–John
John, my problem with a gas tax is that even though I am the model, i.e. I live within walking distance of my job and don’t need to drive, I get hammered by this tax because it will raise prices.
So, while some people might be driven to change some of their behavior to save a little money, my belief is that most of the tax would be bourne by companies who’d have to pay higher wages to keep their workforces happy. That, of course, gets passed on to all of us in the form of higher prices. You end up punishing everyone, whether they conserve or not.
If you ration gas, at least you force everyone into the same boat, plus it has an immediate affect on the world market. If you offer a tax deduction at least you actually benefit those exhibiting the behavior you prefer.
“It wouldn’t be a drag on the economy.”
As SUVs are the highest profit margin vehicles for the big 3 automakers, higher CAFE standards on those vehicles would definately depress their profits. This would cascade up and down their supply and distribution chains. Thus, there would be a drag on the economy.
Having said that, I am all for higher CAFE standards on SUVs.
And as an owner of a modern diesel engine, I average 45 mpg in a car that is safe and fun to drive. As soon as I confirm that it will not void my warranty, I’m switching to biodiesel. Now THAT is true indedpendence from middle eastern oil.
But you may find yourself beholden to McDonald’s and their deep fat fryers…